Cisco's Connected World of Tomorrow: An Internet of Everything

In the future, your life will be connected. The word won't mean what it does now, which is that you have a smartphone and a larger-form computer, and both are Internet-enabled. The gulf between your connected life today, and the world you'll connect to in the future, will eventually seem as wide as the Atlantic Ocean before Columbus' crossing. But don't take my word for it. Listen to Cisco (NASDAQ: CSCO  ) -- they're the ones who decided that even an Internet of things was too small in scope. Cisco envisions an Internet of Everything, and they're probably going to be right.

Everything is connected
Cisco's ambition sounds a bit like science fiction. The company estimates that 99.4% of all physical objects in the world remain unconnected -- all but 10 billion out of 1.5 trillion things. The value (net profit) of connecting all of those things: $14.4 trillion.

Cisco sees this potential developing in the next decade, by 2022. To put that incredible number in perspective, consider global GDP, which was $70 trillion when last assessed in 2011. If global GDP were to double again over the next decade, as it has since the end of the dot-com bubble, it would rely on the Internet of Everything for a fifth of that growth. Growth is already kicking in: Cisco projects $613 billion in corporate profit worldwide this year as the Internet becomes an Internet of Everything. That's only a little more than half of what the world's businesses could have if they better understood how to leverage this new trend.


Source: Alan Levine via Flickr .

Over the coming decade, much of this value will come from connecting workers through mobile collaboration and other methods ($2.2 trillion), making factories smarter ($2 trillion), and connected marketing and advertising efforts ($2 trillion). Manufacturing and retail will gobble up the lion's share of this new value, as Cisco expects 38% of that $14.4 trillion in new profit to flow to those two industries.

So, what does all of this mean?

General Electric (NYSE: GE  ) has been on the vanguard of connected industry with its "industrial Internet" initiative. GE foresees sensor-equipped jet engines, utility turbines, and electric equipment feeding data to control centers that would track their status in real time, offering precise real-time adjustments that would have been unavailable to dumb machinery. Manufacturing, which is already highly automated, could be overseen with far greater control once everything on the assembly line has a link to everything else.

Hospitals would benefit enormously -- chipped beds could offer the sort of full-body sensing accuracy previously restricted to expensive scanning machines, and with the added benefit of reporting back to a nurse in real time. You might even swallow chips in pill form to gather vital data, which might be relayed to your doctor for better diagnostics, preventing you from having to go to the hospital in the first place.

That primarily covers the "things" part of the Internet of Everything. Cisco also expects benefits to accrue in data and processes, which are linked together -- you can't have better processes without more accurate data, and you can't have more accurate data if your collection processes are out of date -- and to people, who would benefit from the efficiencies offered by a connected world. If everything is connected, pretty much everyone could simply do their jobs remotely. Why go to the factory if the factory can run from your laptop? After a certain point, you might not need to go anywhere at all -- you could control your entire house from the comfort of your favorite chair. That might be great news if you really liked the idea of the space cruise ship on Wall-E.

Cisco also expects the Internet of Everything to encompass farming, resource extraction (mining and oil drilling), water management, city planning, transportation, and, well, everything else. Anything that isn't connected now is likely to benefit from a connection over the long run.

As the world's leading connectivity hardware manufacturer, Cisco has a vested interest in making sure this happens, but the Internet of Everything isn't likely to need much of a push to get moving. Both Freescale Semiconductor (NYSE: FSL  ) and Texas Instruments are on the leading edge of the hardware side of this Internet of Everything. I would give Freescale the edge at present for its industry-leading miniaturization capabilities (you can read more about its latest chips in the link earlier in this paragraph) -- it's hard to conceive of a working wireless chip much smaller than the pinhead-sized one Freescale already has on the market under current chip-making constraints. However, technology continues to surprise us every day, and other semiconductor manufacturers won't want to leave their slice of $14.4 trillion on the table.


Source: woodleywonderworks via Flickr .

The downside of a connected world
Cisco recognizes that there will be problems to overcome when everything becomes connected.

Chief among these issues is security: the world already loses over $300 billion a year to hacking and malware, and that's with less than 1% of the world available to be hacked or otherwise infected. The potential losses to malicious actors become exponentially greater if there are an exponentially greater amount of connections to exploit. Cyberwarfare and cyberterrorism may very well displace their real-world variants as the biggest worry in an Internet of Everything, and it's likely that a significant amount of the new value realized in this world will flow to cybersecurity companies. Cisco and its peers typically build a security later into their networking products, but more dedicated specialists like Palo Alto Networks and Symantec are likely to gain the most. Palo Alto has already gotten ahead of the curve by developing its security suite specifically for cloud-computing applications. That sort of experience seems ideal in a world where computation and data collection are dispersed across billions of smaller (but more interconnected) pieces of hardware.

A lesser cousin to security is privacy: When everything is connected, privacy will be something you can only opt out of by living in a cave, like the Unabomber. While this has been one of my major professional concerns, I have to recognize, also, that the American public simply doesn't seem to care about privacy. Two-thirds of the populace has no problem with privacy intrusions in the pursuit of terrorist threats. If the choice is simply between privacy and personalized service online, the same numbers of Americans still choose against privacy. The end result of constant connectivity is likely to be a society that accepts constant oversight, whether it's from the government, or from the pizzeria across the street.

The third primary issue at hand in deploying an Internet of Everything is the data it will generate. Big Data platforms are growing rapidly, but most businesses still haven't capitalized on this torrent of information. Big Data makes up a tiny sliver (about $34 billion) of the total value created by the Internet of Everything, but it should be one of the largest beneficiaries -- what use is a connection to everything if you can't make sense of what everything is doing? It doesn't help that Big Data remains a specialist niche within the already highly specialized world of software engineering. Two of the largest Big Data specialist firms, TIBCO Software and Splunk, each had dozens of unfilled jobs in the field earlier this year. This isn't something that can be taught in a weekend seminar, and it will take time for the analytic side of the coin to catch up to the Internet of Everything's ongoing hardware deployment.

Where do we go next?
The same issues that plague implementation of an Internet of Everything have been with us since the earliest days of the Internet itself. They may slow the spread of connectivity through the world, but it won't be stopped -- this is one of the last frontiers of technology that's still within reach today. Understanding the long-term implications of this trend toward constant connectivity can help you adapt in a changing world, whether you're looking for a better job (remote factory foreman, perhaps?) or are simply looking for investment opportunities on what might just be technology's next great wave.

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